The Economist is predicting that the President Buhari-led administration
of All Progressives Congress will lose in next year's presidential
election.
The Economist Intelligence Unit (EIU), the research unit of The
Economist Magazine, has predicted that the opposition Peoples Democratic
Party (PDP) will defeat the ruling All Progressives Congress (APC)
candidate in the upcoming 2019 presidential election.
EIU stated this in its latest country forecast overview on Nigeria that was obtained yesterday by THISDAY.
The EIU, which gave an array of reasons for its prediction, said even
though it would be a close call, the opposition PDP would win the
election.
It predicted slowdown in economic activities in Nigeria as politics
takes centre stage. The Economist’s report came to light a day after
the New Telegraph published another research report by a multinational
banking and financial services company, HSBC, which said a second term
for President Muhammadu Buhari would gravely stunt the economic
development of the country.
Buhari is already preparing for a re-election in February 2019.
A group, Nigeria Consolidation Ambassadors Network (NCAN) had last
week purchased N45.5million nomination forms for the president who
remained unchallenged as at yesterday. Collection of nomination forms
closes today.
The opposition PDP is also in the process of selecting its flag bearer.
With 13 aspirants picking up the N12million presidential nomination
forms, the Board of Trustees (BoT) of the party yesterday set up a
12-man committee to liaise with the contestants and work out the
possibility of producing a consensus candidate from among them.
The London-based magazine, which also anticipated a depreciation of
the naira, said further in its assessment that Buhari was fast shedding
support from within the APC with governors and lawmakers defecting to
the opposition en masse.
“Intra-party politics would be chaotic ahead of the poll and we ultimately expect the incumbent to lose power,” it said.
According to the magazine, “The 2019 elections will be a close
contest between the ruling APC and the PDP. We expect the PDP
presidential candidate to win, but for the next administration to
flounder against the same problems as the incumbent one.
“The next government is likely to be led by the PDP, the main
opposition, potentially in a coalition with smaller parties, but
instability will remain an insoluble challenge.
“Internally, not all ambitious politicians from the APC who
have defected will be rewarded with places in the next government; or if
they are, it will mean that pre-existing grandees within the PDP will
have been sidelined.
“Whoever ends up feeling cheated will eventually turn on the
new administration, as is happening to the APC now. There is also a
unifying PDP presidential candidate, with around 16 aspirants competing
for the nomination.
“A weak APC before the election and a troubled government
thereafter implies that Nigeria’s manifold security threats will
continue to fester.
“Parliamentary rifts will remain the main problem, and this
applies no matter who is in charge, given competing priorities between
representatives from different regions and the absence of a common
ideology within parties.”
Continuing, it noted that policy reforms, particularly in the vital
oil industry would be slow as a result of division in the political
elite between advocates of tough, unpopular market reforms and those who
refer pandering to nationalistic and pro-subsidy interest groups. The
latter group was likely to remain in the ascendancy, it added.
According to the EIU, politicisation of economic policy would also
slow reforms and at times actively decelerate economic growth.
“The Central Bank of Nigeria will not act completely
independently, and the overall policy agenda will be pulled in differing
directions by various powerful interest groups,” the report stated.
“Fiscal expenditure will remain dominant by recurrent spending
despite attempts to boost capital investments. Efforts to boost non-oil
tax revenue will be constraint by weak bureaucratic capacity and low
economic growth. Constrained by a crippling infrastructure deficit,
economic growth will be well beneath level needed to boost job creation
and increasing living standard.
“Inflation will generally remain high over the forecast period
(2018-2022) amid expansionary fiscal policy and high food prices
stemming from government efforts to limit import and support local
producers.
“The authorities will continue to interfere in the foreign
exchange market although the degree of interference should eventually
lessen with higher oil prices supporting reserves and broad economic
confidence slowly improving. The naira will nonetheless depreciate over
2019-21 and be broadly stable in 2022,” the report explained.
Furthermore, the EIU held the view that Nigeria’s current account
would record marginal gain over the forecasts period, saying pick-up in
oil prices would be offset by recovering import demand.
The difficult business environment will restrict the development of non-oil exports, it added.
The report further pointed out that without a collective resolve,
it would prove impossible to bring permanent peace to the large parts of
Nigeria hit variously by an Islamist insurgency in the north,
ethno-nationalism and piracy in the main oil-producing region and
secessionism in the Biafra region, as well as inter-religious tensions
and disputes over land access across the centre of the country.
“It will prove hard to build a more effective security
apparatus while also creating economic opportunities for local
populations; poverty lies at the root of much of the instability.
“Our central forecast is, however, that the 2019 elections will
be completed without a widespread breakdown in stability with Nigeria’s
democracy proving once again to be robust enough to endure.
“However, we expect major unrest to continue in 2020-2022 as
comprehensive solutions prove too complex and costly to implement in the
medium term.”
It noted that given the severe risks to stability, speculation over
the threat of a military coup or a civil war was likely to surface
periodically.
It stated, “That these issues are part of the popular discourse
highlights the seriousness of the challenges facing Nigeria, but we
consider a widespread breakdown of security to be unlikely; the military
is more professional and has been depoliticised since the junta stepped
aside in 1999.
“Meanwhile, there is little appetite outside more extremists’
agitators for a return to civil war, given memories of how disastrous
the 1967-1970 conflict was for the country.
“Nevertheless, as the country’s leadership struggles to shift
Nigeria onto a more sustainable and robust pat of economic development,
the risks to stability will intensify as more and more Nigerians
question what they have to lose from pushing for violent change.”
HSBC: Buhari’s Second Term Poses Risk to Economic Devt
In its own report, put together by its Global Research Unit,
entitled, ‘Nigeria, Papering over the Cracks,’ HSBC said Nigeria’s
current economic struggles look set to continue if Buhari wins a second
term in office.
According to the financial institution, although the president’s
“approval ratings sit near all time lows,” a development, it said, “largely
reflects the impact of Nigeria’s painful recession in 2016-17 and the
sustained economic hardship that has accompanied his presidency,
including rapidly rising joblessness, and poverty,” the president will once again lead the APC into the 2019 elections.
It, however, stated, “A second term for Mr. Buhari raises the
risk of limited economic progress and further fiscal deterioration,
prolonging the stagnation of his first term, particularly if there is no
move towards completing reform of the exchange rate system or fiscal
adjustments that diversify government revenues away from oil.”
The multinational banking group, which is Europe’s largest by total
assets, noted that while higher oil prices have brightened Nigeria’s
macro outlook, boosting export earnings, improving the supply of foreign
exchange, and supporting naira stability, the Buhari administration was
yet to address the economy’s structural shortcomings.
It said, “Economic growth remains sluggish and reliant on the
rebound in oil output while the non-oil economy, which accounts for
about 90 per cent of GDP, continues to languish with many service
sectors still mired in contraction.
“Joblessness continues to rise, up almost three-fold in three
years to 19 per cent in Q3 2017, pushing the number in poverty to 87
million. “Meanwhile, current account improvements may have pivoted on
higher oil prices, but they also derive from on-going import
restrictions and limited FX access for many sectors of the economy.”
PDP BoT Sets Up Committee to Pick Consensus Presidential Candidate
Perhaps looking to make The Economist forecast real, the BoT of the
PDP yesterday revealed that it had set up a 12-member committee to
discuss with the party’s 13 presidential aspirants, with the view to
picking one of them as consensus candidate.
Those in the race for the presidential ticket of the PDP are,
former Vice President, Alhaji Atiku Abubakar; Sokoto State Governor, Mr.
Aminu Tambuwal; Gombe State Governor, Dr. Ibrahim Dankwambo; President
of the Senate, Dr. Bukola Saraki; former Governor of Jigawa State,
Alhaji Sule Lamido; former Governor of Kaduna State, Senator Ahmed
Makarfi; and former Minister of Special Duties and Inter-governmental
Affairs, Alhaji Tanimu Turaki (SAN).
Others are: former President of the Senate, Senator David Mark;
former Governor of Kano State, Senator Rabiu Kwankwaso; former Governor
of Sokoto State, Alhaji Attahiru Bafarawa; former Plateau State
Governor, Senator Jonah Jang; Mr. Stanley Osifo and Dr. Baba Datti
Ahmed.
The BoT had last week met in Abuja where they said they were
working to ensure that they reduce the increasing number of presidential
aspirants, but noted that they would not force any aspirant to step
down.
However, the Chairman of the BoT, Senator Walid Jibrin, in a text
message to THISDAY said that the committee would impress it on the
aspirants, the dangers inherent in having such a large number of them in
the race.
He stressed that the committee would not compel any of the
aspirants to withdraw from the race, but rather they would be persuaded
to put the interest of the party above their personal interests and
ambitions.
Jibrin, who admitted that the present number of aspirants was
complex, noted that there were fears that there could be disagreement
among the contestants that could lead to major divisions after the
primaries.
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